In an effort to make sense of the rapidly changing fashion industry, Business Of Fashion magazine (BoF) in collaboration with McKinsey Global have released their very first annual The State of Fashion Report. What do we learn from it?

One of the toughest years on record

As fashion executives around the world reported to BoF & McKinsey Global, 2016 can be summarised in three words: uncertain, changing, and challenging. Terrorist attacks in France, the Brexit vote in the UK, and the volatility of the Chinese stock market have created shocks to the global economy, which has not been this volatile since the depths of the financial crisis of 2009. Meanwhile, consumers have become more demanding, more discerning, and less predictable in their purchasing behaviour, which is being radically reshaped by new technologies.

The industry performance in 2016 has not been even across all market segments and categories. One category that is experiencing significant deceleration is watches and jewellery. While it was the fastest growing category between 2005 and 2015 – having enjoyed a compounded growth rate of 11% according to the McKinsey Global Financial Index (MGFI) – watches and jewellery sector is expected to grow just 1.5-2% this year. The luxury end of the category suffered an especially hard blow.

2016 YEAR IN REVIEW: FASHION INDUSTRY TRENDS

Trends of 2016, according to the report:

Athletic wear has grown significantly in response to consumers’ push for casualization.

Genderless fashioncollections have emerged for those unwilling to conform to the traditional male- or female-only clothing staples. Zara launched their first “genderless” collection in March this year, following earlier moves by the likes of Selfridges to reconfigure its gender departments the year before.

The focus on plus-size fashion is at an all-time high, with the number of mentions of “plus size” in the fashion press so far in 2016 tripling versus last year. A trend that makes concerned a lot of industry professionals. Celebrity, fashion photographer and journalist Joe Alvarez commented on the subject: “It’s a new ‘lazy’ fashion, where people who cannot get fit are seen as ‘victims’. Modelling is a profession. You have to learn it and get fit.”

Virtual reality (VR) headsets are introducing the industry to the immersive world of three-dimensional fashion shows. During the September 2016 New York Fashion Week, 13 shows in all were broadcast in 360-degree VR, including collections from Prabal Gurung, Rebecca Minkoff, and Erin Fetherstone. Dior and Tommy Hilfiger are just two of the brands using VR in stores to transport headset-clad shoppers to prerecorded catwalk shows.

Fast fashion trends. Some luxury brands, led by Burberry, Tom Ford, and Tommy Hilfiger, have experimented with the “see-now, buy-now” approach, extending it all the way to the runways of September’s fashion shows.Others—both luxury and mass-market brands—are experimenting with same-day, or in specific markets, even one-hour delivery.

The unprecedented level of turnover among creative directors for several major luxury and fashion brands. Designer exits and arrivals at Christian Dior, Lanvin, Calvin Klein, Saint Laurent, Ermenegildo Zegna, Berluti, Balenciaga, Oscar de la Renta, Brioni, and Carven, amongst others, have set the trend in 2016. At the same time, the reduced time between fashion collections has led to an increase in alleged plagiarism. Though, truth be told, this has gone on for very many years.

Glimmers of recovery ahead – 2017 Forecast

The report suggests that the performance will vary according to the individual dynamics of specific market segments and categories. Value and affordable luxury are likely to be the big winners. Athletic wear is positioned to be the absolute category winner, maintaining 6.5–7.5 percent sales growth, albeit no longer growing at a double-digit rate overall.

The affordable luxury segment seems likely to continue benefitting from consumers “trading down” from luxury, while signs point to the continued growth of the value segment in line with the international expansion of large global players.

10 Trends that will define the fashion agenda in 2017

INTENSIFYING VOLATILITY. Volatility is the new normal. Geopolitical instability, terrorism, Brexit, and stalled trade deals will all increase a pervasive sense of uncertainty in the global economy.

CHINA’S COMEBACK? China’s fundamentals, including the growth of the middle and upper classes, remain strong and the government’s new fiscal policies are expected to improve conditions in 2017, but uncertainty remains. Here of curse should be mentioned that the endemic corruption in every layer of Chinese society including copyright theft in all areas and bogus ‘stock market’ does not give us a true picture of the Chinese economy, despite what some reports may claim.

URBAN ENGINEER.City-based strategies trump country-based strategies: a new class of rapidly growing wealthy cities in newly influential markets are becoming central to the evolution of fashion.

SHREWDER SHOPPERS. Working harder to keep up with smarter shoppers: “always-on” consumers are becoming ever more sophisticated, more technology-driven, and harder to predict.

GENERATION CORRELATION. Opportunities to serve the young and the old better: fashion companies should consider how to fine-tune and diversify the way they approach both retired and millennials consumers.

THE WELLNESS DIVIDEND. Feeling good is the new looking good: more fashion players can start profiting from the wellness movement rather than competing with it.

CHANGING THE RHYTHM. Disruptions to the fashion cycle: expectations set by the faster pace of fashion and consumer desire for instant gratification must be addressed to deliver fashion immediacy.

ORGANIC GROWTH. Investing more to nurture local clientele: 2017 has the potential to be the year of organic growth based on deeper relationships with existing clients rather than geographic, channel, and store network expansion.

OWNERSHIP SHAKE-UP. Emotionless reappraisal of brand portfolios: fashion conglomerates can be expected to further intensify their focus on big brands, creating space for other brands and industry outsiders such as private equity and family owners to acquire targets.

The article was originally posted in Ikon London Magazine and is based on the report published by BoF and McKinsey Global that can be found here.

Ready For a Quick Self Coaching Session?

“What Would You Like To Have Happen?”

Clearly formulate your answer; write it down if required.

Answer the below question and press Next.

And whereabouts is X?

— X represents your own response

Disclaimer

Please note you are using an automated Business Coaching Journal Self Coaching Tool. This tool can not compare to a professional life coach session and you are advised to book a session with a professional Business Coach or Life Coach.
Browse our articles to find the right coaching professional for you.
Please note, coaching is not professional mental health care or medical care. If you feel psychologically stressed to the point that it is interfering with your ability to function, please seek the help you need in the form of a professional counselor.